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Primary energy consumption is projected to increase across all states over the next two decades. However, in line with assumptions about economic activity, energy resource endowments, economic structure and the significance of mining in the economic base, growth in primary energy consumption is expected to vary across states (Table 7).

Relatively higher gross state product assumptions, together with relatively high shares of mining in economic output and relatively high degrees of export orientation, are key factors underpinning the relatively higher energy consumption growth rates in Queensland, Northern Territory, and Western Australia (Table 7).

Table 7: Primary energy consumption, by state and territory State/territory 2014-15 (PJ) 2034-35 (PJ) 2049-50 (PJ) % share 2014-15 % share 2049-50 % average annual growth 2014-15 to 2049-50

New South Wales 1540 1869 2051 26 24 0.8 Victoria 1310 1488 1677 22 20 0.7 Queensland 1447 2136 2445 24 29 1.5 South Australia 363 382 384 6 4 0.2 Western Australia 1038 1384 1526 17 18 1.1 Tasmania 121 125 134 2 2 0.3 Northern Territory 197 277 324 3 4 1.4 Australia a 6016 7661 8541 100 100 1.0

New South Wales includes the Australian Capital Territory.

a Numbers in the table may not add up to their totals due to rounding.

Reflecting the expansion of energy intensive industries, primary energy consumption in Western Australia is projected to rise from 1 038 petajoules in 2014-15 to 1 526 petajoules in 2049-50 (or by 1.1 per cent a year over the projection period). In Queensland, primary energy consumption is projected to rise from 1 447 petajoules to 2 445 petajoules, growing at a rate of 1.5 per cent a year (Table 7). Currently the second largest primary energy consuming state, Queensland is projected to lead Australian states in terms of total primary energy consumption by 2049-50.

Energy consumption in the Northern Territory is projected to grow at an average rate of 1.4 per cent a year to 324 petajoules by 2049-50. This high growth reflects the large

contribution of the mining sector output and expected expansion in the region’s LNG export sector.

Growth in primary energy consumption in the other states is projected to be relatively low. This is particularly the case for South Australia and Tasmania. Reflecting the modest economic growth outlook, primary energy consumption in South Australia is projected to grow by just 21 petajoules, or 6 per cent, over the entire outlook period. In Tasmania, energy consumption is projected to grow at an average rate of 0.3 per cent a year. In Victoria

energy consumption over the outlook period is projected to grow at a slightly higher rate of 0.7 per cent a year.

Growth in energy consumption is projected to be more moderate in South Australia and Tasmania driven by assumed lower economic growth. Despite the slower growth, New South Wales is projected to remain the second largest consumer of energy after

Queensland. Its energy consumption is projected to increase at around 0.8 per cent a year and increase from 1 540 petajoules in 2014–15 to 2 051 petajoules in 2049–50 (Table 7).

Primary energy consumption, by sector

At the sectoral level, the main drivers of primary energy consumption are the electricity generation sector, the transport sector and the manufacturing sector. These sectors are projected to account for 64 per cent of the increase in primary energy consumption from 2014-15 to 2049-50 (Table 8).

The electricity generation sector accounted for the largest share (34 per cent) of primary energy consumption in 2014-15. Total primary energy consumption in the power generation sector is projected to grow at the rate of only 0.3 per cent a year, to increase from

2 054 petajoules in 2014-15 to 2 278 petajoules in 2049-50 (Table 8). Further details about the electricity generation sector projections are provided below.

Table 8: Primary energy consumption, by sector

Sector 2014-15 (PJ) 2034-35 (PJ) 2049-50 (PJ) % share 2014-15 % share 2049-50 % average annual growth 2014-15 to 2049-50 Electricity generation 2054 2268 2278 34 27 0.3 Agriculture 103 133 157 2 2 1.2 Mining 523 1051 1211 9 14 2.4 Manufacturing 1244 1456 1618 21 19 0.8 Transport 1752 2325 2723 29 32 1.3 Commercial & Residential 339 427 554 6 6 1.4 Australia a 6016 7661 8541 100 100 1.0

a Numbers in the table may not add up to their totals due to rounding.

The transport sector (excluding electricity used in rail transport) is expected to account for 29 per cent of primary energy consumption in 2014-15 and continues to rely heavily on oil. Consumption of oil and petroleum products in the transport sector is expected to grow steadily over the projection period at an average rate of 1.3 per cent a year driven largely by economic growth (Table 8). Also, the share of the transport sector in primary energy

consumption is projected to increase marginally from 29 per cent to 32 per cent over the period to 2049-50. This effect is evident due to the slow growth in two main fuel consuming sectors in the economy, electricity generation and manufacturing.

The manufacturing sector is the third largest user of primary energy in Australia, accounting for a share of 21 per cent in 2014-15. This sector covers a number of relatively

energy-intensive sub-sectors such as petroleum refining, iron and steel, aluminium smelting and minerals processing. While energy consumption in the manufacturing sector is projected to increase at an average annual rate of 0.8 per cent over the outlook period, the share of the sector in total primary energy consumption is expected to decline, which reflects a progressive structural shift toward less energy-intensive sectors.

The mining sector, while contributing only 9 per cent of primary energy consumption in 2014-15, is projected to have the highest energy consumption growth rate (2.4 per cent a year) over the outlook period. This reflects the continuation of global demand for energy and mineral commodities and the large number of mineral and energy projects (including LNG and coal seam gas) assumed to come on stream over the outlook period. The

considerable volume of investment is a major driver of the expected expansion in the mining sector and the associated growth in primary energy consumption. In 2049–50, the sector is projected to account for 14 per cent of Australian primary energy consumption.